Oxy to acquire interest in Joslyn oil sands project

By OGJ editorsHOUSTON, June 23 -- Occidental Petroleum Corp. has reported signing a definitive agreement with Enerplus Resources Fund to purchase a 15% interest in the Joslyn oil sands project in northeastern Alberta for $500 million (Can.).

Joslyn, operated by France's Total SA, holds more than 8 billion bbl of bitumen in place. Recoverable reserves, net to Oxy, are estimated at 370 million bbl.

While still in the early stage of development, Joslyn currently has more than 1,800 delineation wells drilled to date and is being developed by steam assisted gravity drainage (in process) and surface mining. Oxy plans to spend $2 billion over a number of years to develop the reserves, the company said.

Production, net to Oxy, from the mining operation is expected to commence in 2014 at 11,000 b/d of oil and plateau at 31,000 b/d.

Enerplus acquired a 16% interest in Joslyn in 2002 and subsequently sold a 1% interest to Laricina Energy Ltd. in early 2006 in exchange for common stock in that company. Enerplus will have invested $115 million on its 15% interest in Joslyn since inception, the company said.

Closing of this transaction is expected in the third quarter and is subject to government approvals.